BEIJING (AFP) - Sichuan Changhong Electric Co., one of China's top three TV-makers, plans to take over bankrupt US-based distributor Apex Digital Inc., the company which owes the Chinese firm some 470 million dollars.
"Taking over Apex will provide Changhong direct access to the US market and retailers such as Wal-Mart Stores Inc. The purchase will indirectly resolve Apex's bad debts with Changhong", the 21st Century Business Herald said, quoting an unnamed Changhong source.
Apex owes Sichuan Changhong 467.5 million dollars and the Chinese TV-manufacturer has said only some 150 million dollars will be recovered based on an evaluation of Apex's assets.
The newspaper said Changhong would draft a detailed purchase plan by February 9.
Changhong spokesman Liu Jianzhong declined to comment on the report.
Chen Yuanwang, an analyst at Huaxia Securities, said "the purchase of Apex could very possibly be the only option for Changhong to solve its bad debt problem with Apex."
The 467.5 million dollar debt would likely be sufficient to cover the purchase, Chen said.
It was unclear how Apex racked up its losses in its distribution partnership with government-run Changhong.
Apex president, David Ji, a naturalized US citizen from China, was detained in October in the southern city of Shenzhen over alleged fraud related to bank bills.
Changhong said last month its full-year income would be hit by its exposure to its largest overseas buyer, Apex.
It posted a 46.86 percent year-on-year fall in net profit to 82.79 million yuan for the first nine months of 2004.
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